Deconverting attic unit weighing options

[Jane Mun]

I have a property that has 3 units currently no basement its an older building in chicago. The property is zoned for 4 units.

The city is asking to deconvert the attic unit that has 1 bathroom and kitchenette and is about the same size and height as the unit below ( dormers were added).  Second egress/exit was not done correctly its not in use it needs to be taken down and redone if I want to legalize it.  I was about to start the process to get a retroactive permit but realized the additional cost of a new exterior stairwell (metal) and architecture fees is almost 30k

Im starting to weigh the options of either full tear down with a new 4 unit construction or separate building in the front of property (current is set back thus the extra costs to permit)  or adding a 2 story 2 unit addition connecting to the old property

sorry this post has become 2 ideas i need advice on

if it deconvert can i use it as an inlaw suite with 2nd floor unit or a duplex up.  What can i keep (id ideally like to keep the bathroom and electrical) a enclosed stairwell/ porch connects them would I need an additional stairwell to be built?

Or should I just scratch the idea and pay the 30k to legalize it. Note It is an old brick  building with old school foundation that had a few inches flooding on the 1st level recently that needs to be repaired thats why I'm weighing all my options.

All advice welcome thx